Qualified Report Definition:

When an auditor is not satisfied with the books
of accounts, records, etc., of the business whose
accounts are being audited or unhappy about
explanations given by the proprietor or staff the
report written as an accompaniment to the audited
profit and loss account and balance sheet may be
qualified.

This is obviously only important where
the auditor is reporting to persons other than those
who keep the books and, for that reason, qualified
reports are generally associated with limited
companies.